Kuznets curve

Hypothetical Kuznets curve.
A measure of income inequality: the top decile share in the US national income, 1910–2010.[1] Piketty argues that Kuznets mistook the 1930-1950 decrease in inequality for the endpoint of its development. Since 1950, inequality has again reached pre-WW II levels. Similar trends are visible in European countries.[2]

The Kuznets curve (/ˈkʌznɛts/) expresses a hypothesis advanced by economist Simon Kuznets in the 1950s and 1960s.[3] According to this hypothesis, as an economy develops, market forces first increase and then decrease economic inequality.

  1. ^ Based on Table TI.1 of the supplement Archived 8 May 2014 at the Wayback Machine to Thomas Piketty's Capital in the Twenty-First Century.
  2. ^ Piketty, Thomas (2013). Capital in the Twenty-First Century. Belknap. p. 24.
  3. ^ Kuznets profileArchived 18 September 2009 at the Wayback Machine at New School for Social Research: "...his discovery of the inverted U-shaped relation between income inequality and economic growth..."